CEIC Insights | The Fed, Volatility and Gold; Aging Brazil; Indonesia flows; China iPhones
Key analysis from the past seven days driven by CEIC's powerful blend of traditional and alternative economic data
Data stories of the week:
Tracking US equity volatility as Fed cut looms
August 2024 saw the most stock volatility in years, with markets hit by a weak employment report that renewed US recession fears. We can examine this phenomenon using volatility indices for the S&P 500 and Nasdaq 100, which are sourced from Exchange Data International (EDI) .
S&P 500 volatility (known as VIX for its ticker symbol) spiked to 38.5 on Aug. 5, the highest since the pandemic panic of early 2020. It's also notable how volatility receded during the Fed's great tightening cycle of 2022-23, amid optimism about resilient growth and a "soft landing."
Usually it’s September, not August, that is the toughest month for US stocks. With the upcoming Federal Reserve Board rate decision considered extremely likely to result in a cut, there is more scope for equities to stay volatile before the month is over.
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The gold-Treasury yield relationship was briefly interrupted this year
The long-delayed Federal Reserve Board "pivot" has been the story of monetary policy over the past year. With markets perceiving a rate cut on September 18 as a certainty, it's worth examining the relationship between the Treasury market and gold -- the classic inflation hedge.
Usually, gold is negatively correlated with short-term yields. Over the past year, we can see that gold rose from about USD 1,900 per ounce to about USD 2,500. Three-month bill yields, meanwhile, fell from about 5.3% to 4.9%.
However, we've highlighted a four-month period where this relationship diverged. From about February, it was apparent that strong US economic data and stubborn price increases meant the Fed wasn't ready to pivot yet; yields stayed the same, but gold kept rising, setting records. Central banks were buying the metal; in April, gold's rise coincided with an equity correction.
The gap began closing in July, when weaker data started convincing the market that a cut was finally in the cards. Bill yields began declining; gold kept rising, retaining its safe-haven luster.
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How Indonesia fund flows correlate with higher prices for commodities
Indonesia is one of the world's largest exporters of key commodities such as coal, palm oil and nickel. As a result, prices for these goods significantly influence the country's economic performance -- and, in turn, investor sentiment toward its financial markets.
We visualized this by tapping our deeper partnership with EPFR , which tracks fund flows and asset-allocation decisions by fund managers around the world.
There's an obvious correlation with the commodity cycle over the past six years. When demand is high for Indonesia's key commodities, international investors seek exposure to such a resource-driven economy.
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Apple in China: who sells the most iPhones?
领英推荐
Amid the fanfare of 苹果 's latest product reveal, we charted iPhone sales at some of the most popular online retailers in China.? (Apple regularly tops the market-share table in China, outpacing rival foreign and domestic brands.)
Data on Jingdong, Taobao and Tmall can be found in our China premium database. Together, these firms capture more than half of Chinese shoppers’ overall online spend.
Jingdong has usually been the biggest seller of Apple devices. In July, its Apple-related product sales reached RMB 12.4 billion. In recent quarters, our data also shows a much higher average price for Apple products sold at Jingdong.
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An aging population in Brazil means fiscal stress
Aging populations are putting stress on social systems across developed markets, but Brazil is seeing similar demographic tendencies.
The nation's population is now expected to start shrinking in 2041 -- six years earlier than previously projected, according to recently released figures from the Brazilian Institute of Geography and Statistics ( IBGE ) .
As of 2023, Brazil had 146 million working-age people and 23 million individuals aged 65 older -- i.e., 6.3 potential active workers per retiree. This ratio is expected to decrease to 3.1 by 2046 and 1.4 by 2070 -- hence why economists are warning authorities about the urgent need for more social-security reforms.
IBGE forecasts also assess regional trends. The northern state of Roraima, which has been receiving immigrants from Venezuela, and Mato Grosso, a major crop-producing state in the Central West region, are projected to experience the largest population increases. By contrast, more populous and developed southern states -- Rio Grande do Sul, Rio de Janeiro, and S?o Paulo -- may see their populations decline.
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Other News from ISI Markets
Back in the index: outlook for Zambia and Ghana sovereign bonds after restructuring
Join REDD for an insightful live webinar that will present the outlook for the new sovereign bonds emerging from Zambia and Ghana’s debt restructurings. Two high-profile market protagonists will provide their perspectives on opportunities and risks of the new bonds. They will also discuss their takeaways from the two African sovereigns’ journeys out of default.
Global Economic Forecasts
EMIS now offers Global Economic Forecasts with Alternative Scenarios by Moody’s to enhance businesses’ Risk Management and Contingency Planning in Emerging Markets. EMIS users can now access Moody’s detailed economic forecasts and alternative scenarios, empowering better strategic decisions.
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